The GEO Group (GEO) versus Jernigan Capital (JCAP) Critical Analysis
The GEO Group (NYSE: GEO) and Jernigan Capital (NYSE:JCAP) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, earnings and valuation.
Insider & Institutional Ownership
95.8% of The GEO Group shares are owned by institutional investors. Comparatively, 69.6% of Jernigan Capital shares are owned by institutional investors. 2.4% of The GEO Group shares are owned by company insiders. Comparatively, 3.2% of Jernigan Capital shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
The GEO Group has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500. Comparatively, Jernigan Capital has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.
This table compares The GEO Group and Jernigan Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The GEO Group||7.05%||14.85%||4.17%|
This is a breakdown of current recommendations and price targets for The GEO Group and Jernigan Capital, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The GEO Group||0||1||2||0||2.67|
The GEO Group presently has a consensus price target of $33.78, indicating a potential upside of 37.98%. Jernigan Capital has a consensus price target of $24.40, indicating a potential upside of 20.97%. Given The GEO Group’s higher possible upside, equities analysts clearly believe The GEO Group is more favorable than Jernigan Capital.
The GEO Group pays an annual dividend of $1.88 per share and has a dividend yield of 7.7%. Jernigan Capital pays an annual dividend of $1.40 per share and has a dividend yield of 6.9%. The GEO Group pays out 139.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Jernigan Capital pays out 95.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Jernigan Capital has raised its dividend for 4 consecutive years.
Valuation & Earnings
This table compares The GEO Group and Jernigan Capital’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|The GEO Group||$2.18 billion||1.39||$148.71 million||$1.35||18.13|
|Jernigan Capital||$6.53 million||44.08||$16.01 million||$1.46||13.82|
The GEO Group has higher revenue and earnings than Jernigan Capital. Jernigan Capital is trading at a lower price-to-earnings ratio than The GEO Group, indicating that it is currently the more affordable of the two stocks.
Jernigan Capital beats The GEO Group on 10 of the 17 factors compared between the two stocks.
About The GEO Group
The GEO Group, Inc. is a real estate investment trust (REIT) specializing in the ownership, leasing and management of correctional, detention and re-entry facilities and the provision of community-based services and youth services in the United States, Australia, South Africa, the United Kingdom and Canada. As of December 31, 2013, its worldwide operations included the management and/or ownership of approximately 77,000 beds at 98 correctional, detention and community based facilities, including idle faclities and projects under development, and also included the provision of monitoring of more than 70,000 offenders in a community-based environment on behalf of approximately 900 federal, state and local correctional agencies located in all 50 states. The Company operates in four segments: United States Corrections and Detention segment, segment; International Services segment and Facility Construction and Design segment.
About Jernigan Capital
Jernigan Capital, Inc. is a commercial real estate finance company. The Company provides capital to private developers, owners and operators of self-storage facilities. It intends to generate long-term returns on development property investments through a fixed rate of interest on its invested capital together with an interest in the positive cash flows of the self-storage development from operations, sales and/or refinancings. It generates cash flows from construction loans and operating property loans in the form of a fixed interest rate and origination fees. It originates various loans, such as bridge loans and credit lines. It has development property investments in Orlando, Atlanta, Tampa, Chicago and Miami. Its operating property loans are located in New Orleans, Newark, Nashville, Sacramento and Chicago. The Company conducts its investment activities through Jernigan Capital Operating Company, LLC. The Company is externally managed and advised by JCap Advisors, LLC.
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